“Escheat property”, by definition is any property that is subject to reversion to the state if no one rightfully claims it. The practice of escheat or unclaimed property (hereinafter “unclaimed property”) originated in feudal England where land reverted to the crown if no heirs could be identified. The practice continues today in every state in the United States under authority granted by various unclaimed property statutes. It has been estimated that there is over $400 billion dollars in unclaimed property in the United States. Some states are holding unclaimed property from as far back as the 1800's.
Most unclaimed property reverts to the state as a result of death of the owner, a change of name as a result of a marriage or divorce, a change of address, etc. Many times an owner of the unclaimed property may know of its existence, but then forget about it or not realize that it has reverted to the state.
Examples of unclaimed property include: cash or personal property; dormant bank accounts; uncashed cashiers checks and money orders; safety deposit box contents; savings bonds; insurance proceeds; corporate dividends; profit sharing distributions; tax returns; utility deposits; wills and trusts inheritances; military, railroad or union pension benefits; HUD/FHA housing refunds; court judgements; mineral royalty payments; real estate; and others. Owners of unclaimed properties include individuals as well as organizations. Examples of holders of unclaimed property required to surrender unclaimed property to the state include: financial institutions, insurance companies, stock brokers, retail, wholesale, service companies, court systems and others.
There are several problems associated with trying to identify owners of unclaimed property. One problem is that every year a state is required to publish the names of unclaimed property owners in a general circulation newspaper in order to notify the rightful owners. However, this publication generally occurs only once a year. If an owner of unclaimed property misses this publication, the owner may never know that he/she is entitled to make a claim to the unclaimed property for that year.
Another problem is that the states typically only publish a list of unclaimed property owners for unclaimed property obtained during a current year. An individual may check a state list of unclaimed property owners for a current year and assume that he/she has no unclaimed property. However, such an individual may be entitled to unclaimed property obtained by the state in previous years.
Another problem is that all states have limited resources in terms of both technology and manpower. Locating unclaimed property owners is a very low priority task in most states.
Another problem is that some states deposit the unclaimed property in an interest bearing account. The interest generated from unclaimed/unclaimed property deposits funds a myriad of state programs from public education to state worker pensions. Thus, many states will not actively try to locate unclaimed property owners because they rely heavily on the interest from such unclaimed property accounts.
Another problem is that many states refuse to grant general public access to unclaimed property lists. In such states, it is often necessary to file freedom of information requests or other petitions to force a state to grant access to unclaimed property lists.
Another problem is that unclaimed property places a large management burden on private financial institutions such as banks. These financial institutions spend considerable time and resources trying to manage unclaimed property that cannot be returned to its rightful owners.
There have been attempts to solve some of the problems associated with finding owners of unclaimed property. There are a number of individuals or companies who, for a fee, will locate owners and facilitate a refund from the state. Such finders on the Internet include “findcash.com” and “fundsrecovery.net” and others. Finders will generally obtain owners names manually from the published listings, libraries or state unclaimed property offices or from the Internet. Finders exist largely because the states' due diligence requirements are minimal.
However, such finders may also only check a current year's unclaimed property list. In addition, finders typically may only provide an individual with the name and address of the state unclaimed property office that has unclaimed property for a fee. The owner of the unclaimed property then has to contact the state's unclaimed property office, obtain the proper forms and request disbursement of the unclaimed property.
Some states also utilize the Internet to post a partial listing of their unclaimed property, and still other states participate in National Association of Unclaimed Property Administrators (“NAUPA”) which acts as a clearinghouse of unclaimed property information. Depending on the source, it is estimated that new unclaimed property accumulates at a rate from hundreds of millions to a billion dollars every year.
Thus, it is desirable to provide a consistent automated method to locate and refund money to unclaimed property owners. The method should include the ability to search a current year's unclaimed property lists as well as previous years unclaimed property lists.